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Limited knowledge required

On 14 March 2012, the Supreme Court handed down judgment in the longrunning Atomic Veterans litigation between a group of former servicemen and the Ministry of Defence1. Whilst the case concerned claims for personal injury, the Supreme Court had to consider and decide on the correct approach to ascertaining the state of a claimant’s knowledge about a cause of action in negligence for the purposes of the Limitation Act 1980. The decision is therefore of application and significance to litigators generally and the fact that the issue was decided by a four to three majority highlights the lack of clarity, and scope for disagreement, that has existed in this area.

Background

The claimants brought a group action for damages for personal injury allegedly suffered as a result of exposure to radioactive fallout during or after British nuclear tests in Australia and the South Pacific during the 1950s. An issue arose in many of the individual cases as to whether the claims were time-barred under the provisions of the Limitation Act and, in July 2007, it was ordered that this question be tried as a preliminary issue.

By the time the issue made its way to the Supreme Court, the key question to be decided was the meaning of knowledge and, in particular, the extent to which knowledge of attributability of an act or omission of the defendant can be equated with belief for the purposes of sections 11 and 14 of the Limitation Act.

Relevant sections of the Limitation Act 1980

Section (11) (4) of the Act provides that an action shall not be brought after the expiration of three years from:

“(a) the date on which the cause of action accrued; or

(b) the date of knowledge (if later) of the person injured.”

The reference to the date of knowledge at 11 (4) (b) requires the court to appraise the claimant’s knowledge of the facts set out in section 14 (1) of the Act, namely:

that the injury in question was significant; and

that the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence, nuisance or breach of duty; and

the identity of the defendant; and

if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.”

Although not relevant to the issues in this case, the Supreme Court acknowledged that the issues to be decided about the meaning of “knowledge” also existed in relation to sections 11A (4) b and 5(b) of the Act (actions in respect of defective products) and section 14A of the Act (special time limit for negligence actions other than for personal injuries, where the facts relevant to the cause of action are not known to the claimant at the date of accrual).

The Supreme Court’s decision

The majority (Lords Wilson, Walker, Brown and Mance) held that attributability means that all the claimant must know is that there is a real possibility that the defendant’s act or omission caused the damage complained of. Referring to the Court of Appeal’s decision in the case of Halford v Brookes2, Lord Wilson endorsed the view that, for the purposes of triggering commencement of the limitation period, knowledge does not mean knowing for certain or beyond possibility of contradiction. It simply means having sufficient confidence or belief in a potential cause of action to justify embarking on an investigation into the claim by taking legal and other advice and collecting evidence.

Unfortunately for the Veterans, the majority view of the Supreme Court meant that their claims were time-barred for limitation purposes and the appeal was dismissed.

Lord Phillips, Lady Hale and Lord Kerr disagreed with the majority preferring the view that knowledge for limitation purposes involved the claimant holding a belief in his claim founded on known fact or reason based evidence. Lord Phillips went so far as to say that it is not desirable that a claimant should commence an action based on a subjective belief that it is not reasonably founded on a basis of fact.

As Lord Mance commented, Lord Phillips’ approach could lead to a situation where a claimant with a bad claim could overcome or avoid any limitation problems because he never has knowledge of the facts which could lead to success. In other words, the claimant could rely on the weakness of the case as a basis for extending the limitation period. This conflicts with the general principle that claims which have no basis in fact should not be allowed to proceed.

This approach would also make it possible (as in the case of the claimants in this action) for a claimant to commence proceedings and plead a claim without having the requisite knowledge for limitation purposes with the result that the limitation period would not start until some time after the claim was afoot. The essential flaw with this approach, as the majority in the Supreme Court highlighted, is that in bringing proceedings a claimant necessarily asserts a belief that he or she has a properly arguable claim by signing a statement of truth. Accordingly, as Lords Wilson and Mance commented, it is a legal impossibility for a claimant to lack knowledge of attributability at a time after the date of issue of the claim since it is by reference to the facts asserted as giving rise to the claim that the question of knowledge must be tested.

Comment

The Supreme Court’s decision is welcome clarification of the test for knowledge for limitation purposes in negligence actions. The central message to potential claimants is not to delay commencing proceedings once there are grounds for reasonably believing that a defendant’s actions are responsible for causing loss or damage.

With regard to the significance of the timing of seeking legal advice, the Supreme Court recognised that it was possible for a claimant to take legal advice before having the requisite knowledge or “reasonable belief” for limitation purposes. However, the Court also acknowledged that an inference that a claimant held the requisite belief from the time when they consulted lawyers about a possible claim could well be justified.

Compare jurisdictions: Arbitration

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